Sunday, July 5, 2009

That's a Helluva Sales Strategy You've Got There

Address: 416 Roswell, 90814
Asking Price: $426,000
Year Built: 1922
Size: 3 beds, 1 bath, 956 sq. ft.
$/Sq. Ft.: $446
Purchase price: $533,000
Purchase date: 2/2006
MLS#: P686872
On Redfin: 500+ days
Down Payment: $85,000
Monthly Payment: $2,400
Income Requirement: $122,000
Description: APPROVED SHORT SALE. Charming 3 Bedroom Bungalow with Hardwood Floors, Spacious Kitchen, Indoor Laundry, and Private Back Patio.

Hilarious. This thing has been rotting on the market since February of 2008 with absolutely no interest. Recently, the asking price was reduced to $399,000, which was obviously still way too much because it continued to collect dust.

The bank finally got around to approving a short sale a few days ago...ASKING $27,000 MORE THAN THE LAST RIDICULOUS WISHING PRICE!

Smart move!

I mean, how does that logic play out? A place that can't garner any interest whatsoever at $417 per square foot is suddenly going to be attractive at $446 per square? WTF?

I understand why the lender wants to squeeze as much blood from this turnip as possible, especially since the short seller purchased this microscopic beach bungalow for an astounding $533,000 (for this place?!) in February 2006. But if the bank's upper management thinks they're getting out of this with only a $131,000 loss, are out of their Kool Aid-snorting minds.

Hell, even the listing agent knows there's no way in holy hell it'll go for $426k: That property description has to be one of the most uninspired, lackluster examples of seeing-the-writing-on-the-wall I've seen in a while.

At a certain point the bank needs to get realistic. Today is not that certain point.


  1. Live on the same block as serial killer Randy Kraft who house located 824 Roswell at the time of his arrest for murdering at least 66 young boys and men! It's a great subject to talk about with neighbors over sunday bar-b-que

  2. Oh great, now you tell me. My daughter goes to daycare 2 blocks up from there. Yikes! No wonder they are worried about recreation park being a place where child molesters hang out...

  3. Kills me that at that price, you'd have to make 122k (per your calcs) to live in what looks like a mobile home. One Hundred Twenty Two thousand dollars a year, for that heap. Right. Have some more Kool-Aid.

  4. GM,

    Puts it all into perspective, right? When affordability products were rampant, income didn't matter because "you could just refinance" or make the minimum payments on an Option ARM. Now that those are gone, we are forced to look at realistic debt-to-income ratios.

    I use 3.5X income because at anything above that, a pay cut, broken garage door, or especially a job loss will all but guarantee an inability to keep up with the debt service.